Exterro’s E-Discovery Case Law Library is a worthwhile resource for all eDiscovery professionals and any attorneys interested in learning more about such issues as new data types, proportionality, and reasonableness. It features a collection of simple and easy to understand analyses of the most significant eDiscovery case law throughout the country. Our blog was recently highlighted in the library, where we provide our analysis on the GN Netcom, Inc. v. Plantronics, Inc. case.

The first Delaware opinion that has been issued that addresses either sanctions or proportionality under the new Federal Rules is GN Netcom, Inc. v. Plantronics, Inc.[1] Plaintiff GN Netcom, Inc. (“GN”) filed a motion for sanctions against defendant Plantronics, Inc. (“Plantronics”) after a long discovery dispute that centered around the “intentional and admitted deletion of emails” by one of Plantronics’s senior executives and his directives to other members of his team to delete emails. More ›

The title of this post may be a bit misleading though and may simply reflect my own ignorance of the true distinction between quick peek and clawback. (Or maybe I'm being pedantic.) Certainly, there are clawback provisions in this order, but the production of documents without review is what makes this a quick peek. The two are often presented as alternative means of protecting privilege waiver in eDiscovery, but it seems that clawback protects privilege while quick peek shifts costs. So quick peek is really clawback plus cost-shifting?

In Part V of this series, we summarized the cases from late 2006 and all of 2007. Quick summary of those cases: the District Court concluded that imaged files should be the default form of production absent party agreement, the Bankruptcy Court issued summary judgment against a party found to have knowingly destroyed ESI despite reasonably anticipating litigation, the Superior Court declared spoliation requires intent not just negligence, and the Court of Chancery required discovery requests be supported by “a particularized showing of need.” On to 2008.

In a series of cases culminating in State v. Sisson, 2008 WL 162825 (Jan. 17, 2008), the Superior Court dealt with multiple issues of admissibility and validity of electronic evidence in a criminal case. Michael Arkfeld's eLaw Exchange provides the following concise summary:

At trial, Sisson filed a motion to suppress evidence collected at his home pursuant to warrant on four grounds: 1) the evidence was stale 2) the probable cause information was insufficient because the affidavit did not show that “emails sent by an internet ‘screen name’ linked to” Sisson were actually sent by him, nor did it demonstrate reliability of sources 3) ”police intentionally or recklessly omitted information” that Sisson may have been the victim of “spoofing” and 4) that the affidavit was recklessly or intentionally misleading in that it incorrectly suggested that the police had actual possession of “the illegal emails to which pornographic images allegedly were attached.” In a ruling on the probable cause argument, the court held that AOL, an internet service provider, was a reliable informant as it was equivalent to a “citizen eyewitness to a crime” and thus no “independent corroboration” of the information it provided was necessary. The court found that there were sufficient facts set forth in the affidavit to support a finding of probable cause “because the ‘screen name’ associated with the email and linked to Defendant was sufficient to allow a reasonable person to believe that ‘seizable property would be found at the address of the Internet subscriber with whom the name is registered’.”

Sisson subsequently challenged his conviction on several counts of Sexual Exploitation of a Child and Unlawfully dealing in Child Pornography to the Delaware Supreme Court and said conviction was affirmed on all grounds. On Motion for Post Conviction Relief, Sisson argued, in pertinent part, that he suffered ineffective assistance of counsel because his attorneys either did not argue or improperly argued on appeal: that a password was not required for email “spoofing”; “that the detectives acted with reckless disregard for the truth by not stating in the search warrant that they did not have the IP address of the computer that sent the email”; that a username alone was not enough to establish a link between Sisson’s home and the computer that transmitted the email; and that the informants supplying the information for the search warrant (AOL and NCMEC) were unreliable. Defendant’s motion was denied on all counts.

In a very short order in February 2008, the Court of Chancery requires a non-party to submit the credentials of its eDiscovery vendor/consultant. Solow v. Aspect Resources LLC, 2008 WL 441394. Competence of third party vendors and counsel is an issue we’re likely to see more of in the future. In a recent case out of Washington State, the court reduced attorney’s fees in connection with eDiscovery work for inexperience.

In the spring, in In re Kent County Adequate Pub. Facilities Ordinances Litig. (April 18, 2008), the Court of Chancery addresses the issue of attorney-client privilege waiver and applies a test that almost mirrors what will become new FRE 502 a few months later. In response to Petitioners’—landowners and developers—motion to compel in an underlying action, Kent County argued that some of the documents requested were privileged. Kent County asserted privilege over a set of documents it had voluntarily produced to support its motion to preclude the depositions of the individual respondents. The Court found that privilege had been waived for these documents. Another set of documents, however, was produced inadvertently, and Kent County sought to recover them as privileged. The Court, in agreeing to the return of the documents, applied the following test:

In order to determine whether the inadvertently disclosed documents have lost their privileged status, the Court must consider the following factors: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure; (2) the time taken to rectify the error; (3) the scope of discovery and extent of disclosure; and (4) the overall fairness, judged against the care or negligence with which the privilege is guarded.

In summer 2008, in In re Intel Corp. Microprocessor Antitrust Litig., 2008 WL 2310288 (June 4, 2008), the District Court adopted a special master’s report finding waiver of work product protection. The plaintiffs moved to compel production of Intel’s attorneys’ custodian interview notes relating to litigation hold compliance. The parties had previously reached a privilege waiver agreement, but the special master found that the agreement did not extend to these notes. However, the special master found a privilege waiver for any custodian statements voluntarily disclosed by Intel. The special master opined that finding otherwise would have allowed Intel to "use its sword to assert facts while at the same time shield" the plaintiffs from Intel’s claim of human errors in its performance of its duty to preserve evidence. The special master concluded that protection of the non-core work product had been waived, so granted the plaintiffs motion for production.

Later that summer, the Court of Chancery, in Hexion Specialty Chemicals, Inc. v. Huntsman Corp., 2008 WL 3522445 (Aug. 18, 2008), enforces a “clawback” agreement. Huntsman inadvertently produced an email drafted by one of its outside counsel and sent to another of its outside counsel and its investment banker in connection with a merger with Hexion. The Court found the email privileged and allowed for its clawback pursuant to the confidentiality order.

About a month later, the Court of Chancery, in a letter decision in Kinexus Representative LLC v. Advent Software, Inc., C.A. 1161-CC, reiterates that native or OCR production is not required “without a particularized showing of need.” Advent produced documents in non-searchable TIFF format. Kinexus moved to compel Advent to comply with an instruction to produce searchable ESI. The Court declined to find OCR required by court rules. The Court did find that Advent’s offer to produce “extracted text” was an acceptable compromise but ordered Kinexus to pay for the processing. It’s not clear what format the “extracted text” was provided in. If anyone if familiar with this case and knows how the extracted text was provided, please leave a comment. I’m sure I’m not the only one who is curious about that.

On September 19, 2008, President Bush signed FRE 502 into law. The newly adopted rule was identical to the one approved by the Judicial Conference of the United States in September 2007.

At last, we reach 2009! We’ll cover 2009 in the next and final installment of this series. In the meantime, if you know of significant Delaware eDiscovery cases from 2008 that you think I should have included, please post a comment to let everyone know.

In Part I of this series, we looked at two cases from the 1990's dealing with Attorney/Client Privilege and Work-Product protection. The next significant case doesn't appear until 2002, when the Court of Chancery tangles with the issue of backup tape restoration.

In Kaufman v. Kinko's Inc., 2002 WL 32123851 (Apr. 16, 2002), in slight contrast to the current view of backup tape restoration, the Court was unmoved by Kinko’s “cost and convenience arguments” explaining that restoration of the backup tapes would be cumulative and cost up to $100,000. Plaintiffs sued over stock valuation in a merger and sought emails between December 1999 and April 2002. They argued that no less burdensome means of discovery exists for the information sought. Kinko’s argued that the information was not readily accessible and that the burden of production outweighed the potential evidentiary benefit. The Court didn’t agree, explaining that,

Upon installing a data storage system, it must be assumed that at some point in the future one may need to retrieve the information previously stored. That there may be deficiencies in the retrieval system (or inconvenience and cost associated with the actual retrieval) cannot be sufficient to defeat an otherwise good faith request to examine the relevant information.

The current view on this issue is to consider the principles of proportionality in such situations. When a party claims that meeting a discovery request would cause an undue burden and excessive cost, courts now typically employ a balancing test to weigh the burden against the benefit. In Kaufman, the Court of Chancery summarily dismissed Kinko's undue burden pleas. The Court has since modified its view, adopting the principle of proportionality. Even if the Court had used a balancing test, it may not have changed the outcome in Kaufman, but it would have changed the analysis.

Just days later, in Tulip Computers Int'l v. Dell Computer Corp., 2002 WL 818061 (Apr. 30, 2002), the Delaware District Court approves the Tulip’s proposal to use keyword searching to identify potentially responsive emails of Dell executives. In a patent infringement case, Tulip sought, inter alia, to compel production of certain emails from Dell executives. Dell argued that none of the executives from who Tulip sought emails would have responsive information. Tulip proposed running mutually agreed upon search terms to identify responsive emails then allow Dell to review for privilege and confidentiality. The Court found that “the procedure that Tulip has suggested for the discovery of email documents seems fair, efficient, and reasonable.”

In late 2002, in Liafail, Inc. v. Learning 2000, Inc., 2002 WL 31954396 (Dec. 23, 2002), the District Court addresses defendant’s allegations of ESI spoliation by plaintiff. In this consolidated contract action, defendant, Learning 2000, Inc. (“L2K”), alleges that Liafail intentionally destroyed relevant, even incriminating, documents from one employee laptop and failed to disclose the inadvertent destruction of data on two other employee laptops. Liafail, although previously asserting that the documents had been destroyed and were not available, claimed the documents had been backed up and were available for production. The Court said Liafail’s contradicting stories indicated it “may have engaged in questionable discovery tactics.” But the Court declined to sanction Liafail, opting instead to allow them to produce the documents they claimed were available. The Court then went to great lengths to warn Liafail that, if they did not produce the documents, the Court would issue an adverse inference jury instruction.

Almost a year later, in Rhodia Chimie v. PPG Industries, Inc., 218 F.R.D. 416 (Oct. 8, 2003), the District Court again deals with issues caused by large ESI volumes, this time considering the expense of production and declaring it a relevant consideration. Rhodia sued PPG for willful patent infringement. Rhodia requests documents from PPG back to 1981 that “substantially” pre-dates the existence of the patent and PPG’s knowledge of the patent. The Court orders the production but recognizes the “magnitude of the labor” and that production would be a “daunting task.” The Court then cites Zubulake v. UBS Warburg LLC, 216 F.R.D. 280, for the proposition that a cost-shifting analysis may be warranted.

In August 2004, the Advisory Committee on Civil Rules published proposed FRCP amendments designed to address growing issues in the discovery of ESI. (Of course, a modified version of the Committee’s proposal was eventually adopted and became effective December 1, 2006.) In November 2004, the Superior Court dealt with instant messaging issues in Smoot v. Comcast Cablevision, 2004 WL 2914287. We’ll pick up with that case in Part III. In the meantime, if you know of significant Delaware eDiscovery cases between 2002 and 2004 that you think I should have included, please post a comment to let everyone know.

In Part II of this series, we looked at four cases from 2002 and 2003 in which the Court of Chancery and the District Court each got into the eDiscovery thicket, addressing issues with backup tape restoration, keyword searching, allegations of spoliation, and cost-shifting. The next significant case isn’t until 2004 when the Superior Court steps back into the eDiscovery realm.

In late 2004, the Superior Court faces instant messaging issues in Smoot v. Comcast Cablevision, 2004 WL 2914287 (Nov. 16, 2004). Smoot was fired by Comcast for engaging in a “four-hour ‘instant message’ conversation with two of her co-workers on her company laptop. The conversation included numerous sexual references and allusions as well as racially derogatory remarks and instances of profanity.” Smoot applied for unemployment benefits and was denied. She appealed to an Appeals Referee who upheld the denial of benefits. She then appealed to the Unemployment Insurance Appeal Board who also upheld the denial. She then appealed to Superior Court. The Court affirmed the Board’s decision. Comcast caught Smoot because the instant message conversation created a 24-page transcript on her company-owned laptop. This case shows us that ESI isn’t just Word documents and emails; it’s created in myriad ways.

In early 2005, in Beck v. Atlantic Coast PLC, 868 A.2d 840 (Feb. 11, 2005), the Court of Chancery sanctioned plaintiff and plaintiff’s counsel for failure to disclose relevant material from the plaintiff’s web site. In an attempted class action, Beck sought to be class representative in a suit against Atlantic Coast for breach of warranty and fraud related to Atlantic Coast’s software. Unfortunately, Beck never purchased or used the software at the heart of the allegation. Atlantic Coast’s counsel found Beck’s web site where he posted his belief that the software did not work and emails exchanged with the developer in which he posed as potential buyer. The Court dismissed the case with prejudice and ordered Beck and his counsel to pay Atlantic Coast $25,000 and $2,500 to the Court. This is comparatively minor in a post-Qualcomm world, but significant at the time. As the case above, this case also expanded the horizon of discoverable ESI.

Less than a month later, in TIG Insurance Company v. Premier Parks, Inc., 2005 WL 468300 (Mar. 1, 2005), the Superior Court reconsiders its own discovery order after misapprehending just how difficult it is to find needles in haystacks of ESI. TIG insured Premier Parks (“Six Flags”) who was being sued in a class action. The Court ordered TIG to produce information regarding law firms it had chosen to defend class actions against other insureds over the previous five years. TIG tried to comply but had no way to sort by matters which resulted in defending a certified class action so they proposed searching for matters with similar expenditure levels (more than $750,000). Six Flags rejected that proposal. TIG proposed to broaden the search to matters with $500,000 in expenditures. Six Flags again rejected, and proposed sending its expert in to TIG’s systems to search for the information. TIG filed for reargument, asking the Court to refine its discovery order. Six Flags, using language very similar to the Court’s in Kinko’s, argued that “TIG may not use its inadequate computer system as an excuse to avoid valid discovery obligations.” The Superior Court did not agree and amended its prior order to require TIG to search its system for matters with $500,000 in expenditures. This is an excellent example of a court employing the principle of proportionality, principle number two of The Sedona Principles.

In the fall of 2005, in Rockwell Automation, Inc. v. Kall, 2005 WL 2266592 (Sept. 9, 2005), the Court of Chancery deals with commingled personal and proprietary data. The defendant had been terminated by the plaintiff. The plaintiff sought recovery of proprietary materials in defendant’s possession. Defendant returned “computer hardware” to the plaintiff containing the proprietary materials and defendant’s personal and privileged information. The Court ordered that plaintiff “retain, at its expense, a third-party service provider to retrieve and review all documents.” The service provider was to identify plaintiff’s proprietary or confidential documents from the corpus and return them to plaintiff. The Court did not provide any guidance on what method the service provider should use to find plaintiff’s proprietary or confidential documents.

We’ll finish up 2005 in Part IV. In the meantime, if you know of significant Delaware eDiscovery cases from 2005 that you think I should have included, please post a comment to let everyone know. If you do it soon enough, you may make it into the next post!

Hello and welcome to the Delaware eDiscovery Report! We will be tracking all manner of developments in the realm of eDiscovery, including federal and state case law and rule developments, emerging trends and discussions from groups like The Sedona Conference® and EDRM, vendor technology developments, and project management techniques. Besides tracking eDiscovery developments generally, this blog will pay particular attention to eDiscovery developments under Delaware law.

With an increasing number of states adopting eDiscovery rules (mostly mirroring the Federal Rules), it may surprise many of you to know that Delaware has not adopted any such rules. There is, of course, case law on the subject, and I'd like to kick off the Delaware eDiscovery Report with a chronological development of the significant EDD cases I could find, bringing us all up to speed on the state of eDiscovery in the First State.

Here's the first of multiple installments:

The earliest cases I could find are from way back in the dark ages of eDiscovery—1992 and 1997. The decisions are from the days before ESI volumes were unwieldy, so the courts are dealing with applying long-standing legal principles of privilege to the newly prevalent electronic medium and the electronic documents it creates.

In March 1992, the Delaware Superior Court decided IBM v. Comdisco, Inc., 1992 WL 52143, finding a portion of an email was privileged in a suit over equipment leasing. IBM produced an email then asked for its return, because they asserted it contained information protected by the attorney/client privilege. Comdisco argued the email was not privileged, because it contained business advice, not legal advice. The Court found a small portion of the email “was clearly intended to be disclosed to persons outside the circle of confidentiality” so not privileged, but found the remainder of the communication privileged and confidential legal advice.

Five years later, in Wesley College v. Pitts, 1997 WL 557554 (Aug. 11, 1997), the Delaware District Court found that an email sent to multiple third parties and introduced into the public record is not protected work-product. One of the Defendants sought relief from a protective order restricting use of documents marked Confidential to the instant matter and no other; Defendant sought to use, in a related state case, an email marked Confidential by plaintiff in this case. Plaintiff claimed, inter alia, that the email was protected work-product. The Court noted that one of plaintiff’s employees sent the email to several other employees and his wife, and plaintiff introduced the email into the record in a hearing on a Motion for Summary Judgment in this case, all of which amounted to removing the possibility of work-product protection.

There doesn't seem to be anything significant for another five years when the vaunted Court of Chancery plunges into the eDiscovery morass by tangling with the issue of backup tape restoration. We’ll pick up with that case in Part II. In the meantime, if you know of significant Delaware eDiscovery cases prior to 2002 that you think I should have included, please post a comment to let everyone know.